Our attention has been drawn to the recent publications both in the print, electronic and social media alleging that products throughput by NNPC in our terminal was expropriated. While we ordinarily would not comment on issues like this, it is pertinent for us to respond as this borders on our integrity.
Those claims are false, malicious and unfounded, it is clearly a misrepresentation of the workings and processes of the downstream operations. It is unfortunate that the national oil firm has chosen to repeatedly distort facts and malign the integrity of our company.
For the sake of clarity, MRS is not a storage company, rather it is a throughput company. It is important at this point to explain in lay man terms, what throughput means. Throughput is akin to a banking arrangement. In a throughput contract, we act as a product bank to different customers who we throughput products for, but because of the operational process involved in replenishing stock, we have 7 days from when we receive the demand to provide the products if we have stock out. This act of storing the products in a comingled state (where products belonging to various customers are mixed) and loaded out on demand is called throughput and is usually for a 30-day period.
Setting the record straight
To set the record straight, we entered into a throughput agreement with NNPC Retail on 30th November, 2016. In line with standard industry practice, the terms of the agreements stipulated that products would be stored in our tanks comingled with products belonging to us and any other client of ours and would be delivered to NNPC or any of its designates within 7 days of demand.
In line with this agreement, NNPC Retail (a subsidiary of NNPC) brought a vessel named MT Undine with (40,637,355Liters) 29,000mts which berth at our terminal on the 8th of December 2016 and 19 days after vessel discharge, no one from NNPC had shown up in our office to request to load out the products. We were constrained to send an email to NNPC demanding that they come and load out their products because we had other vessels waiting to berth and were incurring demurrage.
On the 30th of December 2016, nearly a month after the vessel discharged in our facility, NNPC officials, bowing to our pressure, finally appeared to familiarize themselves with our loading procedure. Between the 30th of December 2016 and 14th of February 2017, NNPC only managed to load out 10,616,685 liters which was an average of 8 Trucks per day, as against our daily load out of 300 trucks. We continued to demand that they come and load their products to free up our storage tanks.
On the 4th of February, 2017, we received an email from NNPC Retail, saying they had loaned their products to PPMC and as such we should load their remaining products to PPMC. It is important to point out here, that PPMC (another subsidiary of NNPC) also throughput products with us and were loading within the same period. Between the 4th of February when we received the email from NNPC Retail and 15th of February, PPMC loaded 11,178,000 liters.
At this point we had 2 vessels, Mt Lilac Victoria with 60,000mts and Mt STI Milwakee with 20,000mts of PMS. The vessel Mt Sti Milwakee was a PPMC vessel carrying our 20,000mts of PMS. This vessel berth at MRS terminal on the 17th of February to discharge her full cargo. Immediately after she berth, PPMC asked that the vessel be pulled out, without regards to the fact that all statutory payments in respect of this cargo had been made. All efforts to get PPMC to allow the vessel to discharge was refused and PPMC insisted that vessel be pulled out. This singular action took 3 days, as all required approvals had to be gotten from the relevant authorities to allow a vessel to sail with full products on board.
Notwithstanding the delay, the next vessel with 30,000mts berth the same day the PPMC vessel was pulled out and commenced discharge immediately. 24hrs after discharge commenced, we had filled up a tank and started loading out of that tank. Both PPMC and NNPC retail were therefore loaded within 6 days from when we stocked out and this is well within the contractually allowable period of 7days. This clearly shows that contrary to the claim by NNPC, MRS never expropriated NNPC products.
We would like to state here, as an established fact that MRS is the only company in Nigeria today that has the capacity to load out 15 Million liters per day. It is also on record that our operations are 24hrs a day Monday through Saturday, and in some cases Sunday to ensure that the country remains wet at all times. In all of these, if NNPC Retail had presented trucks for loading when their product came in, we could have loaded them within a week. It was their failure to present trucks for loading that led to the 3 months’ period it took to load out their products.
As at today, NNPC has completed loading their products and have exceeded with over 3 Million liters of MRS products. We would have demanded this excess; however, we know that these deficits and surplus products hold is usual in the throughput process.
We have taken pains to provide these details in the hope our explanation will put this matter to rest for good and the public and media are now fully informed of the facts relating to the NNPC products throughput with us.